OCR Level 3 Cambridge Technicals in Business Unit 4: Business Accounting Capital and Revenue

Capital Income The money used to set up a business – initial investment - sole trader/partnership Share capital – Private and Public limited companies Further investment into the business by owners Loans received from a third party

Revenue Income Money received from normal business activity – sales revenue Rent received Commission received

Capital Expenditure Expenditure incurred on the purchase, alteration or improvement of fixed assets Fixed assets - items that will be used in the business longer than one year Capital expenditure includes the following: Improvement to fixed assets – not repair Legal costs of buying property

Revenue Expenditure Expenditure incurred on running expenses. Running expenses – costs that are incurred in the running of the business which are not directly related to sales. These would include: Rent, rates, interest payments on a loan Utility bills – gas, water, electricity Running costs of vehicles – petrol

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